Question about opening an independent agency on Long Island...

GoingIndy · 09-05-2008, 12:44 AM

I'm looking to open an independent agency (not the greatest idea in a soft market) on Long Island and wanted to know if anyone familiar with New York can give me some information in regards to getting contracts with most of the popular and profitable carriers in the state.

Here's some background on myself...

Born and raised on Long Island, I worked as a Licensed Sales Associate for a State Farm agency on Long Island for 2 years before moving back to Arizona (Arizona State alumni). I then opened my own Allstate agency for 4 years. Sold that when they started shifting their focus on financial services (didn't get into this business to be a financial advisor). Took a management position with Allstate and have had that for the last two years. Now I'm looking to move back to Long Island (to be closer to family) and open an independent agency. Also, I hold my P&C, Life and Health and my 6 & 63.

Right now carriers out here in Arizona are basically handing out contracts to independent agents if you have a pulse. It's extremely easy. However, I know New York is a whole different animal, particularly the coast (Long Island) because of the threat of "The Big One". Companies like Allstate are pulling their Homeowner market off the table.

So, is it nearly impossible to bring on carriers as a new independent agency, even with my background or do you think because of my background, I may find it easier than someone coming in without any agency ownership experience?

I could open an agency in Arizona tomorrow if I wanted to, but like I said, my wife and I want to bring our family back to NY to be with family.

I have all of my ducks in a row and the last, but most important piece left, is getting those carriers.

Thanks in advance.

robliano · 09-06-2008, 09:01 PM

Hey, I'm not sure, are you asking about health in NY? I'm in Long Beach, NY, PM me.

Paradigm · 09-06-2008, 11:17 PM

Are there any health insurance carriers operating in new york state and what do they pay in commission. Are they all guaranteed issue?

GoingIndy · 09-07-2008, 12:04 AM

Robliano,

I can't PM you yet because I don't have 20 posts yet. I was inquiring about P&C, not health... although my sister-in-law is trying to get me to switch.

SFTICA,

I appreciate your advice, however... I've been there, done that with a captive Allstate agency and I will never go back to being captive again. Also, I had a favorable loss ratio when I had my Allstate agency. I have the numbers to back my experience and sales skills, especially as a scratch agent when I started my agency. I wouldn't recommend anyone going captive... ever. I've worked on both sides (independent and captive) and the days of the captive markets having superior products are over.

robliano · 09-07-2008, 01:40 AM

Originally Posted by Paradigm

are there any health insurance carriers operating in new york state and what do they pay in commission. Are they all guaranteed issue?

Aetna, Cigna, HIP, BC, Atlantis (is scary), Oxford, yes, many here, highest commission is 8%, level though, premiums are nuts, Aetna quoted me $900 a month, individual.

GoingIndy · 09-07-2008, 05:23 PM

Couldn't disagree more.

The price DOES matter.

The product DOES matter.

And of course the relationship matters.

As for the cost of running MVR's and credit, I don't know how Connecticut does it but in Arizona, the company's cover those expenses. If running those reports is abused without writing enough of the business, then the agency gets charged back. For example, with Allstate it's called their Data Expense Initiative. The ratio is 2:1 which means for every 2 MVR's you run, you need to write 1 piece of business. Anything above that, you pay for out of your commission. So captive companies have the ability to charge the agency as well.

GoingIndy · 09-07-2008, 09:57 PM

It is cyclical which is exactly why having an independent agency is an advantage over the captive's. I can shop them with other companies within my own agency rather than risk losing the business all together.

As for the state to state business, more people are moving out of New York than they are into it.

I'm not here to argue which is better, captive or independent because I already know what's best for me, I was just looking for some information regarding individual carriers in New York. I've worked as a captive agent for Allstate and now in management so I know how the business works on both ends... in the agency and by the paper-pushers in management who don't have a clue on what it takes to run a successful agency.

I also don't know how you can back up the captive market when I've read in your other posts that you're $160,000 in debt from running your State Farm agency in only 3 years.

Regardless, I appreciate your input.

saintquinn · 10-21-2008, 09:36 PM

Yes, Atlantis is very scary...
Why sell this health crap for such low commissions?
I wasted 9 months this year (with scary Atlantis...)

robliano · 10-22-2008, 09:32 AM

If you sell on price, price matters, if you sell on value, price doesn't matter so much, and it's usually the agent selling on price, that's why the client buys on price.

I've seen agents lowball right off the bat, why not start at the top instead?

1manshow · 10-22-2008, 10:35 AM

You obviously know more about Allstate than I do, but here in Pa they offer IA contracts to independants. When I spoke with them about my NY office they wanted me to be captive ?? At the time (4yrs ago) they were the competition in NY. Had a nice contract for a new agent also.

Either way, Erie Insurance is one of the few companies who will appoint scratch agencies and I know Erie is writing in NY as we are currently representing them. Would be worth a call. They are quite particular about regional representation, so I don't know if long island is a market they wish to gain marketshare. Also Hartford seems to be active in NY in our area as of late and hungry for representation. Either way, could always take a Smart Choice contract and then buy it out if all goes well, but I'm sure you've already looked into that option.

Good luck in the move

robliano · 10-22-2008, 08:04 PM

Let me guess, you worked for Italians on Long island?

Originally Posted by saintquinn

Yes, Atlantis is very scary...
Why sell this health crap for such low commissions?
I wasted 9 months this year (with scary Atlantis...)

gstker · 10-26-2008, 06:31 PM

Originally Posted by GoingIndy

It is cyclical which is exactly why having an independent agency is an advantage over the captive's. I can shop them with other companies within my own agency rather than risk losing the business all together.

As for the state to state business, more people are moving out of New York than they are into it.

I'm not here to argue which is better, captive or independent because I already know what's best for me, I was just looking for some information regarding individual carriers in New York. I've worked as a captive agent for Allstate and now in management so I know how the business works on both ends... in the agency and by the paper-pushers in management who don't have a clue on what it takes to run a successful agency.

I also don't know how you can back up the captive market when I've read in your other posts that you're $160,000 in debt from running your State Farm agency in only 3 years.

Regardless, I appreciate your input.

Couldnt agree with you more. I use to be an EFS with Allstate, and was offered to open up my own Allstate. I decided not to do it because I was watching my fellow agents suffer in this economy. I am opening an indy office with many carriers. I feel that I am selling myself and the best price, not the carriers commercials. Most of the Allstate agents I know cant keep the business on the books in this environment.